Spain: We are building a “war economy”

Is Europe heading down the path of war? If so, the middle east would be a likely target with the tensions building up over the year between two regions. Only time will tell — and history does repeat itself.

In the midst of deep recession and massive unemployment, with a higher than expected deficit and a general strike round the corner, Spain – despite reforms and deep budget cuts – is struggling to emerge from the crisis and is causing new concern within the euro area.

The 2012 Budget will be rolled out on Friday against this disturbing backdrop. No one doubts that it will lay out a path for a kind of wartime economy, if the metaphor is permitted. The government will face two conflicting but legitimate claims. Firstly, from citizens, who want the gigantic unemployment market, bigger in Spain than in any other OECD country, to be tackled first, and the safety net to be maintained. Secondly, external demands, whose priority is to draw down the public deficit.

Full article: Spain: We are building a “war economy” (Press Europ)